A production possibilities curve that is "bowed out" or concave to the origin:
a. illustrates a tradeoff in which the opportunity cost of a good increases with the level of its production.
b. illustrates a tradeoff in which the opportunity cost of a good decreases with the level of its production.
c. illustrates a tradeoff in which the opportunity cost of a good is constant at all levels of production.
d. demonstrates the fallacy of composition.
c
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An increase in the interest rate would ________.
A. increase consumption B. decrease government purchases C. decrease investment D. increase net exports
Which statement is FALSE?
A. Technological change is the key to productivity growth. B. Productivity is output per unit of input. C. The only way to build up capital is to consume more and save more. D. In the 1950s, 1960s, and 1970s, Americans managed to save about 7-8% of disposable income.
Which of the following accurately shows the sequence that happens when demand for a product increases?
a. Price of product increases; the product’s supply increases; buyers compete for the product; a new equilibrium is reached. b. The product’s supply increases; buyers compete for the product; price of product increases; a new equilibrium is reached. c. Buyers compete for the product; price of product increases; the product’s supply increases; a new equilibrium is reached. d. Buyers compete for the product; the product’s supply increases; price of product increases; a new equilibrium is reached.
Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. When Leo's earnings are less than $300, each extra dollar he earns causes his total income (earnings plus benefits) to:
A. rise by 75 cents. B. fall by 25 cents. C. fall by 50 cents. D. rise by 50 cents.